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A STUDY ON IMPACT OF FREIGHT FORWARDERS OVER LINER

IN CHENNAI

THE PROJECT REPORT SUBMITTED TO

AMET UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE

OF

MASTER OF BUSINESS ADMINISTRATION

IN

SHIPPING & LOGISTICS MANAGEMENT

BY

S.MARIA DOSS

(MBA / 0376 /10)

Under the guidance of

MRS.M.FATHIMA, MCA, M.Phil, MBA, M.Phil.

Assistant Professor, MANAGEMENT STUDIES

AMET UNIVERSITY


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AMET UNIVERSITY

KANATHUR, CHENNAI-603112.

DECLARATION CERTIFICATE

This is to certify that the work presented in the dissertation entitled A STUDY ON

IMPACT OF FREIGHT FORWARDERS OVER LINERS IN CHENNAI in partial

fulfilment of the requirement for the award of Degree of Master of Business

Administration, in Shipping and logistics Management from AMET University,

Kanathur, Chennai is an authentic work carried out under my supervision.

To the best of my knowledge, the content of this dissertation does not form a basis for the

award of any previous degree to anyone else.

(MRS.M.FATHIMA)

Date: Project Guide

Department of Management studies,

AMET University,

Kanathur 603112, Chennai.

(MR. J.P.THIAGARAJAN) (MR. N. SRINIVASAN)

Head of Department, Dean,

Department of Management studies, Department of Management studies

AMET University, AMET University,

Kanathur 603112, Chennai. Kanathur 603112, Chennai.


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CERTIFICATE OF APPROVAL

The foregoing dissertation entitled, A STUDY ON IMPACT OF FREIGHT

FORWARDERS OVER LINERS IN CHENNAI

Is hereby approved as a creditable study of research topic and has been presented in a

satisfactory manner to warrant its acceptance as prerequisite to the degree for which it was

submitted.

It is understood that by this approval, the undersigned do not necessarily endorse any

conclusion drawn or opinion expressed therein, but approve the dissertation for the purpose

for which it is submitted.

(Internal Examiner) (External Examiner)

Head of the Department

Department of Management Studies


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ACKNOWLEDGEMENT

I would like to express my gratitude to our respected Chairman Dr.J.Ramachandran and our

Vice ChancellorMr.S.Bhardwaj for their kind encouragement.

I am immensely thankful to my respected guide Mrs.M.FATHIMA, Lecturer, Department of

Management Studies, AMET University for his guidance support and encouragement

rendered to me throughout the project. I also wish to address special thanks to

Mr.N.Srinivasan, Dean, Management Studies, Mr.J.P.Thiagarajan , Head of Department of

Management Studies and Mr.J.Rengamani, Associate professor, Department of

Management Studies, for their support during the project.


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EXECUTIVE SUMMARY

This project says about an analysis of impact and expectation of freight

forwarders over Liners. The services of the Liners offered to different freight forwarders are

become very competitive. The research developed to understand the efficiency of Liners

depend upon the services such as cargo tracking, price fixing and other related cargo

movement activities.

The busiest route for liners was on the North Atlantic with ships traveling between Europe

and North America. It was on this route that the fastest, largest and most advanced liners

travelled.

Liner Shipping is a service industry that by general acknowledgement provides the lifeline of

international trade. Suffice it to say that, due to the morphology of our planet, 90% of

international trade takes place by sea. Technological developments in ship design and

construction, and the ensuing economies of scale of larger ships, have also promoted trade

particularly that of developing nations- by making economical the transportation of goods

over long distances. This has expanded markets for raw materials and final products and has

facilitated the industrialisation of many countries around the world.

The method of data collection used by the researcher is

1. Survey method

2. Interview method


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CHAPTER PARTICULARS PAGE.NO

AKNOWLEDGEMENTS

EXECUTIVE SUMMARY

CHAPTER 1 INTRODUCTION

1.1 OVERVIEW OF THE TOPIC

1.2 INDUSTRY PROFILE

1.3 SCOPE OF THE STUDY

CHAPTER 2 RESEARCH METHODOLOGY

2.1 RESEARCH OBJECTIVES

2.2 RESEARCH DESIGN

2.3 SOURCE AND TYPE OF DATA

2.4 RESEARCH TOOL

2.5 DATA ANALYSIS

2.6 LIMITATION OF THE STUDY

CHAPTER 3 REVIEW OF LITERATURE

CHAPTER 4 TOPIC SPECIFIC CHAPTER

BIBLIOGRAPHY


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CHAPTER 1 :

INTRODUCTION


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1.1 OVERVIEW OF THE TOPIC

Although the freight forwarders are not a shipping line or a MTO or a NVOCC, we will

discuss their role as they are also an important role to play as far as liner shipping is

concerned.

The International Freight Forwarder is popularly known as the "International Transport

Architect". Ocean Freight Forwarders must be licensed by the U.S.

Federal Maritime Commission which refers to Forwarders as "Ocean Transport

Intermediaries" or, "OTI". An important part of the licensing requirements is the requirement

that the "OTI" post a General Surety Bond in the amount of $125,000 (Soon to be raised) to

protect the public. In India, a law is being contemplated to regulate the freight forwarders as

they are not regulated so far. In India, Customs house agents are regulated as their

competence is checked. For any malfeasance or misdemeanor, they can lose their licence to

operate. CHA, as they are called, have the ocean freight intermediaries in India for a long time

now and they were now acting as freight forwarders. Most of them still to be professionalized

in offering value added service to their clientele on par with what their counterparts in

developed countries offer.

The freight forwarding professional advises clients of the best rates, routings, and modes

of transporting goods to or from any area in the world. Using the vast resources at their

disposal, forwarders find the "right match" of services available so that products are moved

by the most timely and cost-effective means. The large volume of freight handled by

forwarders gives those advantages not always available to either individual shippers or

integrated carriers. The professional forwarder is also aware of the ever-changing


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regulations affecting cargo movements, such as foreign documentation requirements,

hazardous materials rules, U.S. government regulations, special handling or packaging

restrictions, and any applicable licensing provisions.

"Customized" services to fit clients' operations needs are their specialty. Forwarders

coordinate arrangements for storage, pick-and-pack operations, consolidations or full

container movements as well as inland transportation to provide clients with true door-to-door

service. Some of the services could be as under:

Liner service is the backbone of international trade in manufactured goods. Liners,

sailing on regular schedules along established ocean trade lanes, move vast quantities of

consumer, industrial and military commodities ranging from video cameras to night-vision

scopes perfume to paint, jeans to milling machines.

International general cargo trade now exceeds 1.2 billion metric tons. The portion of

this cargo that is containerised approaches 100 percent on routes between developed

economies. Globally, the so-called penetration of containerisation is estimated to be about 55

percent. As ports and transportation infrastructure improve in the developing world, and as

inter modal transportation becomes more viable in these regions, general cargoes will

increasingly move in ocean containers. Containerised general cargo trade is increasing by 8.6

percent per year over the period since 1993, which far exceeds growth rates of other sectors in

ocean shipping.'


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1.2 INDUSTRY PROFILE

Freight forwarders including NVOCCs, 3PLs, brokers and other transportation

intermediaries play an important role in helping shippers move cargo from one city, state,

country or continent to another. Working with a variety of asset-based carriers across multiple

modes land, air, sea or rail forwarders coordinate shipments to ensure goods are delivered

on time and on budget.

International freight forwarders typically arrange cargo movement to an international

destination. International freight forwarders, have the expertise that allows them to prepare

and process the documentation and perform related activities pertaining to international

shipments. Some of the typical information reviewed by a freight forwarder is the commercial

invoice, shipper's export declaration, bill of lading and other documents required by the

carrier or country of export, import, or transhipment. Much of this information is now

processed in a paperless environment.

The FIATA short-hand description of the freight forwarder as the 'Architect of Transport'

illustrates clearly the commercial position of the forwarder relative to his client. In Europe

there are forwarders that specialize in 'niche' areas such as rail freight and collection and

deliveries around a large port. The latter are called Hafen (port) Spediteure (Port Forwarders).

A forwarder in some countries may sometimes deal only with domestic traffic and never

handle international traffic.


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1.2.1 Liner service defined

Liner shipping provides a fixed frequency and between a set of specified ports

according to a prefixed schedule. This resembles a Train time table and assures a predictable

time frame of transit for export and import trade who could plan their procurement as well as

production. Whether the vessel is full or not, the liner vessels will call on a particular port on

the appointed day. Liner vessels also are meant for the trade at large. That means any importer

and or the exporter can approach the liners with a space request. Provided space is not fully

sold, the liner will accommodate all requests. In this aspect, the liners are common carriers.

All legal cargoes will be accepted without discrimination. The number of users of liner vessel

is many. To simplify, the space is being sold in retail. This has its disadvantages as we will

see later.

The tariff is also announced in advance and the cost of carriage is also well factored

into by the trade. Any increase in rates for operational reasons is advised to trade at least few

weeks in advance. The structure of rates is made clear to all customers from time to time. In

ongoing, regular businesses negotiate the rates well in advance and have rate contracts in

place. These rate contracts are basically agreements to provide a set of rates which will

remain firm or vary according to mutually agreed formula. This makes sense for both parties;

the liner would like to have some portion of stable volumes throughout the year which are to

be expected with contracts. The trader would like to avoid discussing rates at periodic

intervals. He will be better off when he negotiates a larger quantity spread over a period. This

gives him a stable rates as well as a firm costing to quote for his products for a longer time in

future.


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The rates in liner service are usually value added products and hence the rates higher

than in tramp trade. Again in tramp trade, the quantities involved are huge and hence freight

rates are lower.

In view of the complexities involved in liner trade the offices of liner companies are

higher. Marketing is involved and hence the number of persons for sales and after sales

marketing is higher.

Liner shipping has a number of customers as it carries many cargoes for many clients.

The customer will look for, besides low freight rates, least transit times, more frequency and

high performance in slippages in schedules. A liner service with poor track record of delays

will have to offer lower freight rates. Better liners can and do demand higher rates. The

connectivity to important ports is vital and the acceptable transit times for sensitive cargoes

enhance the marketability of liners. Liners preserve to be seen as a brand rather as a

commodity by their market friendly service patterns and attractive freighting policies. The

service package, among other things, consists of advising the clients of vessels arrivals,

feedback on their cargo tracking, Delivery details and in general keeping the clients advised

of any delays to vessels. Nowadays, this kind of service is given 24/7 when the cargo tracking

is done on line. The client with the help of the Bill of lading number can access the website of

the Liner and can check for himself the status of the cargo. Any line who does not offer such

state-of- the-art tracking cannot face the demands of the market place and will have to be

satisfied with lower end of the clients.

To summarise, Liner service has fixed schedules, regular frequency and a tariff for all

destinations and is meant for a large number of customers. Stable rates for a period of time are

a must. Predictability in rates, schedule and fixed transit times help sellers and buyers plan

their inventory as well as their production programmes.


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For containerised business it has now become a standard practice to have no less than

a weekly service. Some have biweekly service. These services are invariably on fixed day

sailings and fixed day arrivals. The entire chain of container movement from one place to

another can be predicted well in advance. Trade plans their inventories and sales based on

this. This high precision in arrivals reduces the idle stocks and eliminates safety stocks. In

fact, one of the factors behind the successes of globalisation lies in the fact that supply chains

are slick and offer reduced costs of the operation of the chain. This improves the volumes as

costs are lower.

For non containerised business, a fortnightly or a service every 3 weeks may be

considered adequate as the client base is small and the trade may not be able to offer regular

volumes at shorter intervals. In case of car carriers, the frequency is mutually agreed between

the exporter (usually the car manufacturer) and the liner. This could vary from 10 days to a

month. Here in most cases, the exporter is one or at most, few car companies. Planning

exercise is relatively simple as only few companies are involved.

For liner companies, it is necessary to have a large suite of clients as they are

committed to a long term schedule and would expect to high percentage of loading

consistently. This is all the more important as competition is very stiff and getting high rates

is very difficult and hence, the loading has to be near full so that profits are not eroded. In

liner service, it is thus important to have an aggressive marketing team which will maximize

the loadings. It is also important to have representation in hinterland points as well as in

Inland Container depots to canvass for cargo. Liner agency will have subagents or, if the

business is vital, their office in off port locations so that cargo interests are always kept in

touch with. Traditionally, the shipping was port based but containerisation, because of its


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multimodalism, has ensured that shipping activity moves closer to the actual shippers and

consignees, no matter where they are. This aspect of business finds that the better liner

companies specializing in containerisation having offices in all cargo rich interior points. For

example, all shipping companies in India will have an office in New Delhi or in Bangalore in

India as these places are full of important exporters and importers.

Liner companies also have more persons compared to tramp business as each seller

has to be given a bill of lading for his cargo and this will have to be manifested. The

documentation requirement is more as more consignments are handled per vessel call. In

addition as we saw earlier, the marketing and customer service is very vital and is person

intensive.

Besides, every consignment has to be receipted at load port end and at discharge port

end; it has to be delivered to the correct consignee. The customs papers have to be prepared at

either end which are called manifests. There is again reporting of consignments taken in for

the purpose of accounting to the agency and to the principle. Collected freight has to be

accounted and repatriated for every single consignment. Then we have claims of short

delivery or loss or damage and these claims have a tendency to prolong for interminable

lengths of time. All these mean that the liner agency is to be staffed adequately than a tramp

agency as documentation needs are very heavy. Paperwork is heavy which is easy to mange

these days as computers are helping us cope with the workload.

Liner business, to sum up, essentially has a fixed schedule, a prenegotiated or pre

existing tariff which is fairly stable and fair amount of loyal customers. It is also people

intensive as it requires more marketing staff and operational staff.


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1.3 SCOPE OF THE STUDY

The study is all about the customers attitude towards the freight forwarders, the

impact and expectation level of customers on freight forwarders in and around Chennai. The

study reviews the services offered by the freight forwarders to their customers in various

aspects of imports and exports. So the researcher here approaches various customers of

different freight forwarders and studies their level of satisfaction and expectation that are

gained from their forwarders. So the researcher here studies for the benefit of both customers

and freight forwarders in terms of satisfaction and good service respectively.

The methods of research study used by the researcher to observe in customer point of

view are survey method, observation method and case study method. So the surveys can be

done personally, telephonic and mail surveys. Observation can be done by structured and

unstructured methods. So the researcher prepares a structural questionnaire format to

understand customers needs and expectation from the freight forwarder in sending and

receiving cargos.

So the researcher after reviewing the various customers about their impact and

expectation he will observe the services offered by the freight forwarders and gives a review

to the freight forwarders to know their strength and weakness in acting as an intermediate, by

knowing the following facts the freight forwarder can access good services to their customers

which will be much useful for their market growth and to retain the customers and to bring in

more customers to their services.

So the researcher hereby says that the study is done for the favour of both customers

and freight forwarders, majority of this research is held for the purpose of the growth and

diversification of the freight forwarder.


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CHAPTER 2 :

RESEARCH

METHODOLOGY


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2.1 RESEARCH OBJECTIVES

To study the expectations of freight forwarders from Liner service

To study whether the freight forwarders are satisfied by Liner services

To study whether customers are willing to go for freight forwarders or liners

To study the satisfaction level of freight forwarders in approaching different Liners.

2.2 RESEARCH DESIGN

DESCRIPTIVE RESEARCH

Descriptive research includes surveys and fact-finding enquiries of different kinds.

The major purpose of descriptive research is description of the state of affairs as it exists at

present. In social science and business research we quite often use Research Methodology: the

term Ex post facto research for descriptive research studies. The main characteristic of this

method is that the researcher has no control over the variables; he can only report what has

happened or what is happening. Most ex post facto research projects are used for descriptive

studies in which the researcher seeks to measure such items as, for example, frequency of

shopping, preferences of people, or similar data. Ex post facto studies also include attempts by

researchers to discover causes even when they cannot control the variables. The methods of

research utilized in descriptive research are survey methods of all kinds, including

comparative and correlational methods.

Descriptive research does not fit neatly into the definition of either quantitative or

qualitative research methodologies, but instead it can utilize elements of both, often within the

same study. The term descriptive research refers to the type of research question, design, and

data analysis that will be applied to a given topic. Descriptive statistics tell what is, while

inferential statistics try to determine cause and effect.


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The type of question asked by the researcher will ultimately determine the type of

approach necessary to complete an accurate assessment of the topic at hand. Descriptive

studies, primarily concerned with finding out "what is," might be applied to investigate the

following questions: Do customers hold favourable attitude towards freight forwarders in

sending cargoes? Descriptive research can be either quantitative or qualitative. It can involve

collections of quantitative information that can be tabulated along a continuum in numerical

form, such as scores on a test or the number of times a person chooses to use a-certain feature

of a multimedia program, or it can describe categories of information such as gender or

patterns of interaction when using technology in a group situation. Descriptive research

involves gathering data that describe events and then organizes, tabulates, depicts, and

describes the data collection. It often uses visual aids such as graphs and charts to aid the

reader in understanding the data distribution. Because the human mind cannot extract the full

import of a large mass of raw data, descriptive statistics are very important in reducing the

data to manageable form.

Descriptive research is unique in the number of variables employed. Like other types

of research, descriptive research can include multiple variables for analysis, yet unlike other

methods, it requires only one variable. For example, a descriptive study might employ

methods of analyzing correlations between multiple variables by using tests such as Pearson's

Product Moment correlation, regression, or multiple regression analysis.

Descriptive statistics utilize data collection and analysis techniques that yield reports

concerning the measures of central tendency, variation, and correlation. The combination of

its characteristic summary and correlational statistics, along with its focus on specific types of

research questions, methods, and outcomes is what distinguishes descriptive research from

other research types.


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Three main purposes of research are to describe, explain, and validate findings.

Description emerges following creative exploration, and serves to organize the findings in

order to fit them with explanations, and then test or validate those explanations. Educational

researchers might use observational, survey, and interview techniques to collect data about

group dynamics during computer-based activities.

THE NATURE OF DESCRIPTIVE RESEARCH

The descriptive function of research is heavily dependent on instrumentation for

measurement and observation. Researchers may work for many years to perfect such

instrumentation so that the resulting measurement will be accurate, reliable, and

generalizable.

The intent of some descriptive research is to produce statistical information about

aspects of education that interests policy makers and educators. There has been an ongoing

debate among researchers about the value of quantitative versus qualitative research, But

descriptive research spans both quantitative and qualitative methodologies, it brings the

ability to describe events in greater or less depth as needed. Descriptive research describes

natural or man-made educational phenomena that are of interest to policy makers and

educators. Predictions of educational phenomenon seek to determine whether certain students

are at risk and if teachers should use different techniques to instruct them. Research about

improvement asks whether a certain technique does something to help students learn better

and whether certain interventions can improve student learning by applying causal-

comparative, correlational, and experimental methods. Some of the common data collection

methods applied to questions within the realm of descriptive research includes surveys,

interviews, observations, and portfolios.


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2.3 SOURCE AND TYPE OF DATA

PRIMARY DATA

Primary research data consists in research to collect original data. It is often

undertaken after the researcher has gained some insight into the issue by collecting secondary

data. This can be through numerous forms, including questionnaires, direct observation and

telephone interviews amongst others.

THE 3 BASIC TYPES OF DESCRIPTIVE RESEARCH METHOD

(METHOD OF PRIMARY DATA COLLECTION)

One of the goals of science and business is description (other goals include prediction

and explanation). Descriptive research methods are pretty much as they sound they

describe situations. They do not make accurate predictions, and they do not determine cause

and effect.

There are three main types of descriptive methods: observational methods, case-study

methods and survey methods. This article will briefly describe each of these methods, their

advantages, and their drawbacks. This may help you better understand research findings,

whether reported in the mainstream media, or when reading a research study on your own.

OBSERVATIONAL METHOD

With the observational method (sometimes referred to as field observation) animal and

human behaviour is closely observed. There are two main categories of the observational

method naturalistic observation and laboratory observation.

The biggest advantage of the naturalistic method of research is that researchers view

participants in their natural environments. Laboratory observations are usually less time-


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consuming and cheaper than naturalistic observations. Of course, both naturalistic and

laboratory observation are important in regard to the advancement of scientific knowledge.

CASE STUDY METHOD

Case study research involves an in-depth study of an individual or group of

individuals. Case studies often lead to testable hypotheses and allow us to study rare

phenomena. Case studies should not be used to determine cause and effect, and they have

limited use for making accurate predictions.

There are two serious problems with case studies expectancy effects and atypical

individuals. Expectancy effects include the experimenters underlying biases that might affect

the actions taken while conducting research. These biases can lead to misrepresenting

participants descriptions. Describing atypical individuals may lead to poor generalizations

and detract from external validity.

SURVEY METHOD

In survey method research, participants answer questions administered through

interviews or questionnaires. After participants answer the questions, researchers describe the

responses given. In order for the survey to be both reliable and valid it is important that the

questions are constructed properly. Questions should be written so they are clear and easy to

comprehend.

Another consideration when designing questions is whether to include open-ended, closed-

ended, partially open-ended, or rating-scale questions. Advantages and disadvantages can be

found with each type:


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Open-ended questions allow for a greater variety of responses from participants but are

difficult to analyze statistically because the data must be coded or reduced in some manner.

Closed-ended questions are easy to analyze statistically, but they seriously limit the responses

that participants can give. Many researchers prefer to use a Likert-type scale because its very

easy to analyze statistically.

In addition to the methods listed above some individuals also include qualitative (as a distinct

method) and archival methods when discussing descriptive research methods. It is important

to emphasize that descriptive research methods can only describe a set of observations or the

data collected. It cannot draw conclusions from that data about which way the relationship

goes Does A cause B, or does B cause A?

Unfortunately, in many studies published today, researchers forget this fundamental limitation

of their research and suggest their data can actually demonstrate or suggest causal

relationships. Nothing could be further from the truth.

ADVANTAGES OF DESCRIPTIVE RESEARCH

Educational research and experiences may contain many variables that cannot be

realistically controlled.

Educational research may require observations of life experiences

Data collection may be spread over a large number of people over a large geographic

area

The advantages of descriptive research include data collection and life experiences

The people being studied are unaware so they act naturally or as they normally do in

everyday situation;


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It is less expensive and time consuming than quantitative experiments;

Collects a large amount of data for detailed studying; As it is used to describe and not

make any conclusions it is easier to start the research with it

2.4 RESEARCH TOOL

QUESTIONNAIRE: A questionnaire is a research instrument consisting of a series

of questions and other prompts for the purpose of gathering information from respondents.

Although they are often designed for statistical analysis of the responses, this is not always

the case. The questionnaire was invented by Sir Francis Galton.

Questionnaires have advantages over some other types of surveys in that they are cheap, do

not require as much effort from the questioner as verbal or telephone surveys, and often have

standardized answers that make it simple to compile data. Questionnaires are also sharply

limited by the fact that respondents must be able to read the questions and respond to them.

QUESTIONNAIRE CONSTRUCTION

A questionnaire is a series of questions asked to individuals to obtain statistically

useful information about a given topic. When properly constructed and responsibly

administered, questionnaires become a vital instrument by which statements can be made

about specific groups or people or entire populations.

Questionnaires are frequently used in quantitative marketing research and social

research. They are a valuable method of collecting a wide range of information from a large

number of individuals, often referred to as respondents. Adequate questionnaire construction

is critical to the success of a survey. Inappropriate questions, incorrect ordering of questions,

incorrect scaling, or bad questionnaire format can make the survey valueless, as it may not

accurately reflect the views and opinions of the participants. A useful method for checking a


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questionnaire and making sure it is accurately capturing the intended information is to pre-test

among a smaller subset of target respondents.

HYPOTHESIS

Hypothesis is a statement that a researcher wants to verify.

For e.g., The new manufacturing process is equal to the existing manufacturing process

The additional Sales outlets has increased the sale of Colour TVs

The amount spent on promoting the brand has its impact on the Sale of the product

TYPES OF HYPOTHESIS

(a) Null hypothesis: This is set based on the null attitude of the research. It means that the

researcher sets null hypothesis with neutral attitude

For e.g., H0: There is no difference between the existing/old manufacturing process and the

new manufacturing process

(b) Alternative hypothesis: This is set based on the biased attitude of the research. It means

that the researcher sets alternative hypothesis with biased attitude

For e.g.H1: Old is Superior to New or

H1: Old is inferior to New

H0: the null hypothesis. The number is from a standard normal distribution with = 0.

HA: the alternative hypothesis. The number is not from a standard normal distribution with

= 0.


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PROCEDURE FOR TESTING HYPOTHESIS

1) Setup of Hypothesis

2) Setting the Level of Significance

3) Selection of a Test Criterion (Z, t, 2, F)

4) Computation

5) Decision-making

2.5 DATA ANALYSIS

The process of evaluating data using analytical and logical reasoning to examine each

component of the data provided. This form of analysis is just one of the many steps that must

be completed when conducting a research experiment. Data from various sources is gathered,

reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of

specific data analysis method, some of which include data mining, text analytics, business

intelligence, and data visualizations.

REGRESSION ANALYSIS

Regression analysis is a statistical tool for the investigation of relationships between

variables. Usually, the investigator seeks to ascertain the causal effect of one variable upon

anotherthe effect of a price increase upon demand, for example, or the effect of changes in

the money supply upon the inflation rate. To explore such issues, the investigator assembles

data on the underlying variables of interest and employs regression to estimate the

quantitative effect of the causal variables upon the variable that they influence. The


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investigator also typically assesses the statistical significance of the estimated relationships,

that is, the degree of confidence that the true relationship is close to the estimated relationship.

Regression analysis is widely used for prediction and forecasting, where its use has

substantial overlap with the field of machine learning. Regression analysis is also used to

understand which among the independent variables are related to the dependent variable, and

to explore the forms of these relationships. In restricted circumstances, regression analysis can

be used to infer causal relationships between the independent and dependent variables.

FORMULAE

Regression Equation(y) = a + bx

Slope (b) = (NXY - (X)(Y)) / (NX2 - (X)2)

Intercept(a) = (Y - b(X)) / N

Qualitative Data Analysis

Qualitative research is much more subjective than quantitative research and uses very

different methods of collecting information, mainly individual, in-depth interviews and focus

groups. The nature of this type of research is exploratory and open-ended. Small numbers of

people are interviewed in-depth and/or a relatively small number of focus groups are

conducted. Participants are asked to respond to general questions and the interviewer or group

moderator probes and explores their responses to identify and define peoples' perceptions,

opinions and feelings about the topic or idea being discussed and to determine the degree of

agreement that exists in the group

Principles of questionnaire construction. The participants went through fifteen main

principles guiding the development of quality questionnaires. Each principle was illustrated

with sufficient examples.


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Differences between qualitative research and quantitative research. It was felt that

understanding the differences between the two was necessary in understanding the

appropriateness of each type of research, appreciating the methods of collecting and analyzing

data.

Methods of qualitative data collection:

o Highly structured interviews,

o Semistructured interviews,

o Unstructured interviews,

Handling qualitative data

Transcribing qualitative data

Analysis of qualitative data:

o More simple schemes Content analysis, simple valence analysis, constant

comparative analysis;

o More complex schemes Effects matrices, developmental research sequence.

Presentation of qualitative findings.

Quantitative Data Analysis

The term quantitative data is used to describe a type of information that can be

counted or expressed numerically. This type of data is often collected in experiments,

manipulated and statistically analyzed. Quantitative data can be represented visually in

graphs, histograms, tables and charts.

Nominal, ordinal, interval and ratio scales of measurement. Sufficient examples and

practical exercises were given to 5 participants using samples of questionnaires to

identify the scales of measurement for various questionnaire items.

Considerations in levels of scale measurement


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2.6 LIMITATION OF THE STUDY

Descriptive studies can yield rich data that lead to important recommendations. On the

other hand, descriptive research can be misused by those who do not understand its purpose

and limitations. For example, one cannot try to draw conclusions that show cause and effect,

because that is beyond the bounds of the statistics employed.

The opinion of the respondent may be biased by interviewer

Individual percerption may be reflected on the research questions.

Time availability

High Cost


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CHAPTER 3

REVIEW OF

LITERATURE


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REVIEW OF LITERATURE

The review done by the earlier researcher JAIMANGAL MAURYA on customer

satisfaction and market potential of freight forwarders reviews and analyses the

following findings:

Awareness level about the company among the existing customers is high.

Most customers compared the researchers company with world class companies.

Satisfaction level of existing customers is good, however for the future prospects more

changes and efforts have to be taken.

Location of the company is good as targeted by customer value.

there is almost 50% retention of customers visited the store before as per the analysis.

Awareness level of the customers about the company is good.

the researcher says Indias freight transport concludes the country will reach average

annual freight traffic growth of 10.2% in the 2009-2011 periods.


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CHAPTER 4

TOPIC SPECIFIC

CHAPTER


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LINER SERVICES

There may be considerations of integration of services with its network of hinterland

services or with other services at the hub points. This is very important and complex and will

be seen briefly here.

The liner service is a round trip from Port A to Port A. . We shall take a simple

case of a liner wanting to operate a liner service between Indian sub- continent to Europe. We

shall see this project in some detail to understand the basics of liner service design.

The starting point is Colombo. Colombo is chosen as this is suitably situated as a hub

for all peninsular ports like Chennai, Cochin, Tuticorin, Vizag besides Calcutta and

Chittagong. The presence of regular feeders from these ports makes it an ideal port for

collecting good volume of cargoes. These ports also have a large volume of imports andhence they may contribute well. Colombo is a good hub as the mainliners are assured of a fast

turnaround and cargo collection for transhipment is smooth and fairly cheap. For developing

this study we shall be assuming some figures which may be slightly at variance with the

actual.

We also want the Indian cargoes from the North as well as west and decide to call

Mumbai ports. That could be Old Bombay port or Nhava Sheva International Container

terminal (NSICT) OR Jawaharlal Nehru Port (JNP). Then we want to call Felixstowe in UK

from where we can connect all places in UK as there is very reliable grid haulage in place.

The next port of call is Antwerp which is an efficient port which has good connectivity to all

nearby cargo rich areas including Rotterdam. In fact, the decision to call either Antwerp or

Rotterdam may be a close one as either port has lot of merits. Then we call at Hamburg which

is the farthest we go before embarking on long voyage back to Colombo. In all the ports, we

do load and discharge simultaneously which reduces the time in port.


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As we start calculating the time required for port stay as well as the ocean passages,

we need some idea of the productivity we expect from the terminals as well as the sea

distances. We shall tackle this as we go along. At Colombo, we will be discharging Peninsular

India containers as well as Calcutta and Chittagong containers. We presume that the vessel is

about 1600 teus of capacity and about 600 will be filled up in Colombo. This means that the

exports will be 600 Teus and taking matched imports, the total throughputs will be 1200 Teus.

We assume for the sake of simplicity that all are 20 only. With 3 gantries working with 25

moves per hour, the number of hours required will be 16 hours (= 1200/25 x 3). This is only

an approximation. As the vessel nears completion, all 3 gantries will not work as only the

gantry with maximum moves will keep working. This will extend the berth stay. Also we

need to provide for berthing and unberthing of the vessel or any tidal times for such activity.

Later, we need to provide for lashing and checking the containers as well as for any port

procedures etc. it is prudent to provide 1 day for such eventualities. Overall we will provide 2

days for entry and exiting port of Colombo. If we have a mixture of 20 and 40, the numbers

of containers will be less although the Teus will be same. In such a case the berth stay will be

even less.

The speed of the vessel is assumed to be 20 knots. The nautical distance between

Colombo and Mumbai is about 827 and we can cover 20 x24= 480 NM in a day and it will

take about 1.723 days. Let us ignore the fractions and take the full days as 2. The transit time

is 2 days.

We do a similar exercise for all the legs and ports to estimate the port stays and the sea

transit, taking into account the moves and nautical distances into account. Out of NSICT, we

count on 800 teus of exports and 600 teus of imports. . This would mean about1800 moves.

Please note that we are taking only 90% load outs. The time required will be 1400/ 20 x 3 =

23 hours approximately. Again the actual time taken will be higher than this as here assumed

that all 3 gantries are used all the 23 hours which may not be correct. Practically, we may

consider only 2.5 gantries working all the time. That is one gantry working half the time and

other 2 working all the time. In this case, the port stay will be about 28 hours. So an

approximate time of 2 days will be considered appropriate and safe. The vessel with acapacity of 1600 will sail with a complement of 1400 (600+800) out of India and will bring in


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1200 teus (600+600). The total moves in 3 European ports are taken as equal quantity of

exports and imports. The number of moves there per port will be about 1400+1200 /3 = 867

teus. The calculations so far look as below.

Days Days

Steaming Lay

1 CMB

2 CMB/NSICT

2 NSICT

16 NSICT/FXT

0.5 FXT

1 FXT/ ANR

0.5 ANR

2 ANR/HAM

1 HAM

16 HAM/CMB

--------------

37 5

Likewise, we keep calculating the times spent in the port as well as on the sea passage

keeping in mind always the times are rounded off to the next higher full days to provide for

suitable cushion for any slippages in schedule. In case of European ports, the productivity is

high and highly reliable and hence 0.5 days can be taken as standard. Also a minor point; as


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vessel sails east bound, the vessel will sail against the clock as the transits will appear to be

for more than 24 hours per day of sailing but this can be ignored for all practical purposes as

the reverse will be true when vessel is west bound. For persons who are not convinced, for

every degree of sailing east the local clock is ahead by 4 minutes and the ship would appear to

have sailed for one hour and 4 minutes but in actuality, it would have sailed only for 1 hour.

From the above, we realize that the total time for the complete voyage is 42 days.

That is, this vessel will be back to Mumbai just after 42 days. That is 42 days divided by 7

days. This means that to provide a weekly service we need 6 units. If we use larger vessels of

same speed, the sea passage times will remain same but the stay at ports will increase as the

vessel may be given same number of gantries but through puts in each port may be higher.

Hence with larger vessels, the total time will increase and more number of vessels will be

required for a complete service.

If we add some more ports like Port Said or Barcelona to cover east med and west med

ports, the port stays and slight deviation will increase the total voyage time. More number of

units will be definitely required as the total voyage time will increase.

Taking this designing of the liner service further, we have presumed the exports at

Colombo as 600 teus per week. We need to break this up further in terms of who is going to

offer this kind of volume on a weekly basis. Traditionally, Colombo freights are low enough

as some east west carriers call at Colombo and top up any unfilled slots and hence rates are

rock bottom. Assume the following indications from load ports on their volume and rate

indications for European direct ports.


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Colombo 100 Teus USD 400

Chennai 250 750

Calcutta 150 850

Vizag 25 850

Tuticorin 150 750

Cochin 100 700

Chittagong 100 850

We need to consider the feeder freight of all ports except Colombo. These depend on

various facts like competition and the volumes available. In case of Calcutta and Chittagong,

the port congestion or river transits makes the operation costly as these involve waste of time.

Assume these are asunder:

Colombo 100 Teus usd 0

Chennai 250 100

Calcutta 150 275

Vizag 25 275

Tuticorin 150 150

Cochin 100 150

Chittagong 100 300

The realization to the vessel will have to be freight less feeder freight and this will be

asunder:


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Colombo 100 Teus usd 400

Chennai 250 650

Calcutta 150 575

Vizag 25 575

Tuticorin 150 600

Cochin 100 550

Chittagong 100 550

We are ignoring the transshipment costs involved at Colombo for simplicity.

Mumbai is a larger market having the entire North India and western India as its

hinterland and we shall allot 800 teus for it and freight rates prevailing are estimated at USD

450.Obviously, the larger market also has many players with larger vessels and hence the

freights will be lower. the spitting of the Mumbai allocation among the ICDs and local cargo

is not taken into account. That will be based on container and cargo availability at all these

locations.

The decision is simple: accommodate all the ports as it makes sense to spread the

risks and local holidays etc will not have much effect as we will be insulated somewhat.

Give maximum allocation to locations which offer maximum retention like Chennai or

Tuticorin and yet do not cut out Colombo as in case of failure of feeders or any strike in

Indian shores, at least Colombo cargo will be assured. A typical allocation will be as follows :


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Colombo 100 Teus 60

Chennai 250 150

Calcutta 150 80

Vizag 25 10

Tuticorin 150 150

Cochin 100 90

Chittagong 100 60

We will analyse this further taking into account inventory available and required at

each location. This is simply not the question of managing and distributing slots based on

contribution to the vessel based on freights alone. We need to consider the inwards or imports

into these locations. This also has to be in similar numbers for balancing the inventory at each

location. That is, the imports per week have to be considered and if needed, these allocations

will have to be adjusted suitably. Basing the allocations on retentions alone will mean that a

deficit location will be given more allocation which it will find difficult to fill. Import

intensive ports have to be given slightly better allocation.

Again, the weights will have their say. The cargoes from Calcutta may be heavy and

mostly be 20s. This may of the order of 19-20mts per teu. Tuticorin on the other end of the

spectrum may be of the order of 10-12 mts per teu. The average weight will be ideally around

12 mts per teu. This will mean that the locations having heavier cargoes will get less

allocation. Then we have the 20s and 40s and these will have to be balanced too. Finally,

the discharge ports should have their fill. The 3 ports of call in our example viz., Felixstowe,

Antwerp and Hamburg will have to be represented in the loadings at Colombo preferably in


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the same proportion of European port loadings. There cannot be a situation where Hamburg

for example, gets 400 teus and others get 100 each per week.

Now we can appreciate the complexities and difficulties involved in design of the

fairly simple liner service. We have seen the loadports for Colombo alone so far. When we

design the ports and ICDs for Mumbai which may include New Delhi, Kanpur, Indore,

Ludhiana, Jaipur, Pune, Baroda, Ahmedabad etc we have to take care of the considerations

mentioned above. ICDs have a peculiar problem that their inputs and outs have to match all

the while. Any repositioning of Empties will be costly and time consuming. In case of ports,

the vessels can bring empties from surplus in slots which are underutilized and these

repositioning is relatively less expensive.

Like wise, we will have to keep fine tuning the liner service taking all operational

aspects as well as commercial aspects.

TYPES OF VESSELS RENDERED BY LINER SERVICE:

Conventional ships

Essentially, there are 3 broad types of liner ships for cargoes-break bulk, container and car

carriers. The general characteristic of ships has been seen in the earlier block. Some basic

details have been seen in 2.2.4 of block 1 about the conventional ships.

Conventional ships have been in existence for centuries and have evolved by each

civilization according to their needs. These have been designed according to the materials

available readily with them. These had come a long way and although their utility is

becoming less felt now, as mentioned earlier they still have a role to play. Especially in case

of mobilisation for war, all break bulk ships are requisitioned as containerised vessels cannot


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carry heavy equipments. The recent example was the US war effort in Iraq when the demand

for break bulk vessels went up so sharply when time and speed was of the essence.

The conventional liner service is by no means defunct. This type does not have the

frequency or popularity of container ships. There are break bulk sailings from Europe and to

China / Japan from /to India on a fairly regular basis. They carry steel billets and machinery

inwards into India and carry granite blocks out of India. As volumes are steady and good, the

liner services in these routes are viable. It is to be noted that these cargoes are not

containerisble as they are unwieldy and their load density is far higher than what containers

can bear.

Once the dominant method of moving goods over land and water, break bulk shipping

appears to be slowly, steadily sliding towards extinction worldwide. It's even getting harder

and harder to find people in the general transportation industry who have actually heard of the

term.

In general, break-bulk cargo is anything that can't be sucked out of a ship with a

vacuum or placed in a steel container box. Though the break-bulk market has declined

steadily in recent years, it still accounts for plenty of goods, starting with perishables and also

including giant rolls of newsprint and plate steel, some types of lumber and wood products

and even rebar.

Yet in each of these areas, when it comes to global transport, break-bulk seems to be

losing ground rather than gaining it. What we've seen in the past few years, just generally

speaking, is that the container shippers got a lot more competitive in their rates and a lot of


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traditional break-bulk cargoes that were palletized changed mode from break-bulk to

containerize. Steel is one example of a commodity that is moving in boxes instead of break-

bulk. Most steel products that we ship do fit within those containers. Even coils fit within

those containers.

.

A demanding inter modal marketplace is one reason for the shift away from break-

bulk. Shippers want to get their containers off of ships and to the marketplace as fast as

possible. Unless ports and other facilities are capable of moving with unprecedented speed,

break-bulk simply can't supply the efficiency today's accelerated supply chains demand.

One of the areas where the shift from break-bulk is most pronounced is in the

perishables sector. Not long ago, break-bulk ships ruled the perishables market. Virtually all

products moved in vast, refrigerated vessels stacked on carefully arranged pallets. Today,

more and more perishable goods are moving via refrigerated containers. "The reefer fleet now

provides around 40 percent of nominal reefer capacity," says a recently published report by

London-based Drewry Shipping Consultants. Refrigerated containers moving on conventional

containerised vessels make up the other 60 percent, the company says.

Volume is declining to the point where the total size of the perishable industry break-

bulk fleet is shrinking. "By end-2002, the reefer fleet numbered 1,253 ships with a combined

capacity of 348.9 million cubic feet," a smaller number than in years before, Drewry says.


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Additionally, the global reefer fleet is developing a "mid-age" profile, with the average ship

more than 20 years old.

In some ways, bad news for the reefer industry turned out to be good news for

perishables shippers. A slow economy and overcapacity translated into bargain rates in recent

years. In the past two-three years, the freight market has not been kind to reefer ship owners.

The future is not without hope, however, but the continued incursions from the reefer box

sector mean the reefer market is no longer in full control of its own destiny.

Not all the news is bad in the world of break-bulk. Market difficulties for one sector

can prove to be opportunities for others, and that's what some say is happening with break-

bulk. In areas where a sizeable infrastructure and sophisticated technology are needed, break-

bulk traffic remains strong.

Newsprint traffic will stay break-bulk for the foreseeable future. A single roll of

newsprint takes up four feet by four feet and weighs 2,200 to 2,300 pounds. One ship can

carry 8,000 tons of newsprint. Specialized equipment is needed to handle the goods with any

kind of efficiency-which means that the ports and service providers that are willing to invest

in those services will have a chance to profit.

Getting traffic of any kind isn't easy and ports had better be prepared to invest large

amounts of time and energy if they want to go anywhere when it comes to break-bulk


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products. Most ports allover, especially the ports which are closer to major container ports are

investing money to attract and retain break-bulk traffic. The key factor is to ensure that there

is zero damage, and that it is efficient and cost-effective. Shippers are looking for facilities

that both have high level of expertise and that are willing to invest in specialized technologies.

Many cargoes are also simply not suited for containerisation. Some ingots are so

heavy that just a few of them will fill a container beyond its legal weight, leading to huge

amounts of legal space. Some of the break-bulk building products that are constantly coming

in are simply too large to fit into a conventional container. In many cases, it is also more cost-

effective for a shipper to charter an entire vessel and load it up with a single product than it is

to rely on a containerised carrier that has to make myriad different stops.

It's far too soon to be writing obituaries for break-bulk though. The reality is that

break-bulk volume is growing worldwide by about 3 percent-a paltry rate compared to

container cargo, which in many ports is soaring at 10 percent or more, but enough to make for

a satisfactory business for both ports and shippers.

In the end, it's all about money. The shift in shipping patterns is, after all, price

driven.


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2.1.3.2 Container ships

Before we see the emergence of container liner services, a brief historical

background will be in order. After the World War II, the world saw a renaissance of trade and

growth. One factor was the technology which was invented during the war was sought for

peaceful and commercial exploitation. The world saw a huge investments and relief being

extended to the vanquished countries like Germany and Japan. Both rose from ashes and saw

a unprecedented growth for decades. Marshall Plan and other generous acts of USA and other

richer countries helped recovery of the world economy. This analysis has been mentioned in

Block 1.1.4.

During the decade following the end of WWII, the world saw heavy delays of break-

bulk vessels allover. The ports could not keep abreast at all with the load discharge rates. Port

stays got longer and longer. The ships started having to wait for their berth. The waiting

periods were building up everywhere. In West African ports, the pre-berthing delay was over

6 months. In gulf ports, it was over 3 month in Khorramshahr (which was the name for

Bandar Khomeini then). In Bombay as it was known then, the delays were over 5 weeks. The

turnaround of the ships suffered. The number ships required went up considerably. Freight

rates went up and for getting your imports you have to plan months in advance. Some short

term measures were tried and worked for some time and in some cases-like constructing

newer ports near the centres of mass consumption or near centres of mass production. Another

technology used was palletisation of cargoes and pre-slinging the cargoes etc.

To understand this scenario, we need to understand the break-bulk operation. The ship

loads break-bulk pieces which may or may not be uniform. The heaviest piece is loaded at the


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bottom and the lightest at the top. The cargoes for the first port of call are loaded at the top for

easy access and the last port of call is at the bottom. All this appears simple and imagine that

at every port you should have the same configuration of stowage. Heaviest cargo may not go

for the last in rotation. At every port you may have to discharge and reload the cargoes if the

cargo for that port is understowed. The marks and numbers may not be always visible or even

if visible; it may not be understood by the local labour.

In ships, the stevedore is a person who arranges labour for loading and discharging. In

Britain, such men are usually called Dockers while in the U.S. the term longshoreman is used,

derived from "along-the-shore man". Loading and unloading ships is skilled work that needs

operating loading equipment, the proper techniques for lifting and stowing cargo and correct

handling ofhazardous materials.

In earlier days, men who load and unload ships had to tie down cargoes with rope. A

special form of stop knot is called the stevedore's knot. The methods of securely tying up

parcels of goods are called stevedore lashing or stevedore knotting.

While loading a general cargo vessel, they use dunnage, which are pieces of wood (or

nowadays sometimes strong inflatable bags) set down to keep the cargo out of any water that

might be lying in the hold or are placed as shimsbetween cargo crates to keep them from

shifting during a voyage.

They are expected to be physically strong and able to follow orders. The labour has to

be not only strong but also clear in their understanding of precautions to be taken while

loading, lashing and securing the cargoes. The cargoes should not cause any damage to any


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other cargo or to the ship and its machinery. For example, the cargoes which can taint others

should not be loaded along with other cargoes. For example, tobacco is never loaded with the

in the same hatch as both have strong aroma and can taint each other. There are many other

considerations in loading of conventional cargoes which a stevedore has to take care.

Traditionally, stevedores would have no fixed job and turn up at the docks in the

morning hoping to find someone willing to employ them for the day. London dockers and

Deal porters called this practice "standing on the stones". In Britain, due to changes in

employment laws, such jobs have either become permanent or have been converted to

tempingjobs.

The plethora of cargoes and with different ports of call in a conventional cargo vessel

can be very tough to plan. With some good and accurate planning, the land/reload can be

minimised, if not eliminated. However, the basic issue remains that the stevedore has to not

only to plan stowage and load cargo but he has to lash secure without damaging the cargo or

the ship or other cargoes already in the ship. Along with that, if we can give a give a good

turnaround for the ship with his productivity, he can consider himself good.

Traditionally, for general cargoes, if we get a productivity of about 150 mts per hook

per shift we can be very satisfied about it. So a vessel having to load and discharge about

2000 mts can expect to stay in the port for over 3 days with 2 hooks operational. If we have

complex cargoes or any overstow problems then the ships stay will be prolonged. In a

conventional ship, loading a single piece of cargo, be it a crate or pallet or a granite block,

involves at least 2 persons in the wharf and 2 in the hatch plus a supervisor to coordinate the

movements. Besides, to stow the cargo on the wings of the hatch as most likely the cargo will

be received at the centre of the hatch, we will need a small forklift or a bobcat plus persons


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who are skilled in lashing and securing the cargo. in order to ensure safety to stevedore

personnel as well as to cargo, the process of securing the cargo, hoisting it clear of the ground,

lowering it into the hatch, unhooking the package and landing it on the hatch takes time, not

mention labour. It is this loading time which is painfully slow. The discharge time will also be

too much as the procedure is similar except in the reverse order. Ultimately, the ship spends

more time in the port than in sailing. There is an axiom is shipping that ships earn money

when they are sailing with cargo. They lose money when they are idling or when they sail

with no cargo.

Some techniques were tried but could not succeed nor could they delay the blossoming

of containerisation. Since these are of historical interest, we shall see them in brief.

The technology used was called unitisation. If we have similar packages of fairly

heavy weight, the rate of load/discharge will improve. if stackability is assured, the stowage

will be faster with little broken stowage. Instead of loading drums of 205 litres- an

international standard- if we load 4 drums of same in a pallet duly secured with one another

and with the pallet, we are handling a package of about 900 kgs which consists of 4 drums.

Here load/stow time is almost same but 4 times the quantity goes in per every cycle,

palletisation of drums and packages of nearly 1000 kgs was recommended which improved

the productivity. Surely, this increases the cost to the shipper who has to palletize at his cost.

Also, the freight is on the gross weight tendered and shipper will have to pay for the weight of

the packing material involved. However, the shipping companies saw the benefit and offered

lower freight for the palletized cargo which was good for both parties.

One more innovative idea was to make the packages and have them preslung. The

shipping company provides slings to be placed around the cargo waiting for the arrival of

ship. This can be done leisurely and is less costly as the vessel is not made to wait for the


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slings to be put around the cargo. The loading of cargo is facilitated with the presence of

slings and these slings remain with the cargo while the cargo is on the ship and this again

makes it easy for discharge of the preslung cargoes.

These techniques did make a difference and yet, the ships were waiting for long times

and the trade was suffering.

Another issue which we saw briefly little earlier, the security of the cargo is suspect

even with any amount of packing as stevedores at both ends handles the cargo. The cargo

stays in the shed (or warehouse) awaiting the ship in the load port and on arrival, the cargo

remains in the port till delivery is taken by consignee. Pilferage or theft is common. This

claim was often laid at the door of the shipping company and here, the shipping company

used to bleed badly. The claim ratio which was the claims per dollar earning used to be 10-

15%.

Container shipping solved all these problems and started a revolution.

Through the 1950s general cargo continued to be handled as break-bulk (on pallet)

cargo. This began to change in 1955. Malcolm McLean recognized that individual pieces of

cargo needed to be handled only twice -- at their origin when stored in a standardized

container box and at their destination when unloaded. He purchased a small tanker company,

renamed it Sea-Land, and adapted its ships to transport truck trailers. The containerisation of

world trade had begun.

As opposed to the transportation of break-bulk cargo, the transportation of

containerised cargo is fast, capital intensive, and relatively inexpensive. While a break-bulk


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ship often took a week to unload and reload, a container ship might be in port for only six

hours for the same amount of cargo. Unlike break-bulk ships, most container ships, over a

period of time, would become non-self-sustaining, i.e., having no cargo cranes aboard.

Break-bulk ports aspiring to become container ports would become more capital intensive --

not only investing in dockside cranes but also in other types of mobile and infrastructure

capital. Berths were redesigned so that container ships could be docked parallel to berths for

easier loading/unloading by dockside cranes. There will be also huge demand on space for

stacking containers, giving delivery and taking in export containers.

Containerisation also radically altered cargo handling tasks, substituting capital for

labor. The demand for dockworkers dramatically declined -- job losses range from 40% to

60% in many countries. In the Port of New York/New Jersey 30,000 longshoremen were

employed in 1970; by 1986 this number had declined to 7,400 dockworkers. U.S.

dockworkers, however, were reluctant to accept changes and negotiated work preservation

schemes that led to a rising surplus of registered dockworkers. This surplus has declined since

passage of the U.S. Shipping Act of 1984 which deregulated U.S. ocean transportation; today,

there is a shortage of registered dockworkers at some ports.

Elsewhere, the same evolutionary process was on when the dock labour who were

highly organized and unionized wanted to prevent loss of jobs and resisting the onslaught of

containerisation. This happened in India as in many democratic countries and prevented the

full use of the benefits of containerisation for a long time. Containerisation, however, came

slowly as it was an idea whose time had come and nothing could stop it.

Basically, the container was a logical progression in unitization concept except it was

a large unit. Malcolm Marshall saw that as a mutimodal unit rather than a large unit. That was


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his genius for his paradigm shift in thinking. The container protects the cargo and theft or

pilferage is avoided. The packing costs are minimised as we do not need sea worthy

packing. The seaworthy packing is a euphemism for protecting the package from rough

handling many times besides protecting the packages from the heeling, pitching and yawing

of the ship during rough passages. The conventional cargo has to withstand the transport from

shippers warehouse to dockside, handling at quay side for loading, stowing in side the hatch

and the actual sea voyage. At disport, it has to undergo handlings in the reverse order.

Insurance costs are lower as it was demonstrated that damage or losses are much less.

One does not have fear tainting by other cargoes as well this cargo tainting other cargoes.

Yet with all these advantages and more, the most crucial difference was the

intermodalism the containerisation spawned. Since time immemorial, the ports were the hub

for shipping and all the hinterland persons had to send the cargo to the port or await the cargo

to be received from the port. Now, the cargo can be sent from your place, your house to the

receivers house no matter where both of you reside. The capability of the containerised

shipments to be booked from house to house rewrote the rules of the game and gave raise to

many new players like NVOCC and new set of documents like MTD which came into being

as ocean transportation is but one leg of the supply chain which connects the shipper and the

consignee. This is the revolution which created an interdependent world where parts are

sourced from different locations, assembly is done in one location and the product is

distributed world wide. Supply chains and global logistics have come to stay as

containerisation started encompassing the globe and was making incursions to all internal

points all over.


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We shall see the progress made as we will discuss these issues later. Suffice to say for

the present that containerisation did make a big impact beyond what its initial proponents

foresaw.

2.1.3.3. Car carriers

We saw, during fifties, there were delays to vessels due to the loading and discharge

operations which were controlled by stevedores in spite of the best efforts and with use of

what ever best technology which was available at that time. This method of lift on and lift off

concept where by cargo is lifted on the vessel and lifted off the vessel at disport was causing

interminable delays. One of the shipping lines started thinking about, during the fifties, a

method to come out of the difficulties. The method was radically different and it was called

RORO. The cargo has to be rolled off and rolled on to the vessel. This is done with

connecting the internal storage area of the ship with the wharf.

At first, wheeled vehicles carried as cargo on oceangoing ships were treated like any

other cargo. Automobiles had their gas tanks emptied and their batteries disconnected before

being hoisted into the ships hold, where they were chocked and secured. This process was

tedious and difficult and could not be used for routine travel. With RORO methods, it was set

to change.

The liner service using RORO vessels will be discussed later as they are similar in

service patterns to that of containerised vessels. RORO vessels are ships with a ramp (an

inclined plane) through which you can roll your cargo into the vessel. This ramp can be a

stern ramp or can be a amidships ramp. The purpose of the ramp is to make a bridge between


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the wharf and the ship which helps the cargo to be rolled on to the ship at loading time and

rolled off at discharge. Basically, this is meant for carrying cars, trucks and such other

machinery which move on wheels, Instead of lifting the cargo with slings, it is better to roll

these cargoes as much damage can happen if these are going to be lifted with slings or any

other equipment. The damage besides, these cargoes on wheels are cost effectively rolled on

and off the vessel. These are specialized vessels which are only meant for mobile machinery

and hence these vessels are fixed most of the time well in advance with specific customers.

There are many types of RORO vessels for very specific uses. To understand the effective

productivity of RORO vessels, 200 cars can be loaded in an hour if all factors are favourable.

The RORO vessel (RO/RO or RORO) derived from the traditional car ferry, where

motor vehicles are driven on and off by their drivers. RO/RO is popular within the European

trade routes. It is also used in other trade routes like the U.S.A.-Central America route and

Europe-West Africa route.

Some modern RO/ROs are designed as a trailer/break-bulk/container carrier suitable

for the deep-sea voyage (long haul), making loading and unloading of containers from the top,

like a full container ship, possible using the crane. The type of cargo that can be carried on a

RO/RO is flexible, including large objects.

The full RORO has low stowage factors, as a result of wasted space around the

underside of the trailers and other motor vehicles. Therefore, the full RO/RO is not ideal for


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deep-sea trade. The low stowage factors, however, are compensated for by the quickness of

the "turn around' time in ports in the short-sea voyage (short haul).

In general, the capital cost for a full RO/RO is lower than the full container ship or the

LASH. When the cargo availability is insufficient in a port in the short-sea trade, investment

in sophisticated container handling installations can be uneconomical. Therefore, the full

RORO offers a solution to short-sea transport needs. A large area of land for parking trailers

and other motor vehicles is necessary while they await loading.

There had been some efforts to take containers using RORO vessels for some areas

where no container terminals exist. The RORO vessels have an internal gantry and have some

prime movers like trailers on which the containers can be loaded and taken to the terminal.

Devanning is done at the wharf and the trailer comes back into the ship with empty container.

This experiment did not succeed much. The Con-Ro vessel is a hybrid between a RORO and a

container ship. This type of vessel has a below-decks area used for vehicle storage while

stacking containerised freight on the top decks. Although some ConRo vessels do exist, they

are not popular.

There is more information given in Block I which are not repeated here.


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2.1.3.4. BARGE CARRIERS

Around the fifties, when shipping fraternity was trying to find answers to various

delays and diseconomies present in the LOLO models, the RORO model was thought of as a

possible solution. Again, some one developed a different model called FOFO model, which is

float on and float off model.

Many problems, often related to the high cost of labor, have changed the economic

and technical natures of shipping. For example, for many centuries materials have been

transported by barges on rivers, lakes, canals, and inland waterway systems to ports near the

river mouth, unloaded there from the barges, loaded onto ocean-going vessels, sent to other

ports across the sea, unloaded there, and reloaded in many instances onto other barges to be

shipped up another river system. In recent years, however, the costs of loading and unloading

cargo have risen higher at an ever-increasing rate. Containerizing of cargoes has helped

somewhat, but even then, as well as in bulk-loaded barges, there has remained the necessity of

unloading the barges at one port, placing the container and other cargo on a pier, and then

loading from the pier into an ocean-going vessel, only to require the reverse procedure in the

ports to which the cargo is carried by that vessel. All this adds considerably to the ultimate

cost of the product concerned, and the time required for transportation.


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BIBLIOGRAPHY

RESEARCH METHODOLOGY: A Guide for Researchers in Management and Social

Sciences by bill Taylor, gautam sinha, taposh ghoshal, prentice-hall of India pvt.ltd. Year

2006

http://www.tiaca.org/images/TIACA/PDF/The%20Changing%20Role%20of%20the%20Freight%20For

warder.pdf

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http://www.ita.doc.gov/exportamerica/TechnicalAdvice/ta_forward_efficiency_0403.pdf

http://www.dachser.com/de/de/08_FIATA_ModelRules_eng.pdf

http://www.agilfreight.co.in/standard%20trading%20conditions.pdf

http://www.blurtit.com/q950778.html

http://www.blurtit.com/q122012.html


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http://www.aect.org/edtech/ed1/41/41-01.html

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&cd=1&sqi=2&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.cwu.edu%2F~jefferis%2FPEHL557%2F

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69aA

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d=1&ved=0CCkQFjAA&url=http%3A%2F%2Fwww.pst-clc.cz%2Fen%2Fobjectives-and-

philosophy&ei=7sa3TrUjjOqtB5jMneAD&usg=AFQjCNHc0FoLnBy-LtBEKP5b9Fay-M8rIA

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Readers with a particular interest in the use of regression analysis under TitleVII may wish to consult the following references: Campbell, Regression Analysis in Title

VII CasesMinimum Standards